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| Poor response to Nelp-VIII |
| BS Reporter / New Delhi Oct 13, 2009, 00:12 IST |
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Of the 80 blocks offered, only 44 attracted bids
Bidding for the latest round of oil and coal bed methane (CBM) blocks closed today with a poor response from bidders. Government-owned Oil and Natural Gas Corporation got 14 blocks, the highest number.
Officials blamed the economic downturn and the “misinformation campaign” launched by the Anil Ambani group for the lacklustre response, that saw offers coming for only 44 of the entire 80 blocks.
Reliance Industries Ltd (RIL) had closely followed ONGC in bidding aggressively during the previous rounds under the new exploration and licensing policy (Nelp). But in this latest round, the eighth, had put in a bid for only one CBM block, losing it to Deep Industries.
According to the tentative list of awardees drawn by the directorate general of hydrocarbons, ONGC will be operator in 14 blocks, with a participating interest in three more blocks to be operated by BG India and Oil India Ltd.
The process of final award of contracts would be completed in about three months. The Union petroleum secretary, R S Pandey, said the ministry would examine whether a second phase of bidding should be launched.
Director general of hydrocarbons V K Sibal, who has been under severe attack from the Anil Ambani group, said it was the group’s “misinformation”, apart from the downturn, that had affected the bidding. He said the sanctity of the production sharing contract had been challenged by the Ambani group’s doings.
In a separate statement, the Anil Ambani group said its chairman “rightly predicted the response to NELP-VIII in his letter to Prime Minister on October 9”. It said changes in the production sharing contract by the petroleum ministry was the sole reason for poor response, not the dispute between its company, RNRL, and Reliance Industries Ltd. “Petroleum Ministry’s open interference by curtailing marketing and pricing freedom is the single biggest reason for lack of international investor interest,” said the statement, terming the government policies “nationalisation”.
Of the 70 blocks offered under the current round of Nelp, no bids came for 34 blocks and single bids came for 20 blocks. A total of 76 bids were received for 36 Nelp blocks. In the case of CBM, 24 bids were received for eight of the 10 blocks on offer. Petroleum secretary R S Pandey maintained that the response was not bad compared to bidding rounds in other parts of the world and added, “It might look that the response was less but if you look at the performance it is more than 50 per cent.”
Besides economic slowdown, Pandey also asserted that misinformation was one reason for such a response. He said since Nelp-1, the amount of freedom or the lack of it has been the same. “There was minor touching up in Nelp-VII but oil prices were high and the response was good.”
The seventh round saw 181 bids for 45 blocks of a total of 57 blocks put on offer. The production sharing contracts for 41 blocks were eventually signed after the Cabinet rejected one Cairn India bid and bidders for three blocks withdrew.
BHP Billiton that had entered the exploration business in India last year is likely to be awarded three blocks in the shallow part of the Mumbai offshore basin. Another foreign player, BG India, that tied up with Oil India Ltd and ONGC is expected to get a deepwater block in the Krishna Godavari basin. Cairn India, along with its parent, bagged one block each in Mumbai offshore and the KG basin.
Of the CBM blocks, Essar Oil will be getting one block, while Deep Industries would be getting seven blocks.
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